377 F.

3d 272

Antwun ECHOLS, an individual

v.
Arthur PELULLO, an individual; Banner Promotions, Inc., a
Delaware Corporation, Appellants
No. 03-2740.

United States Court of Appeals, Third Circuit.

Argued February 24, 2004.
Filed: July 30, 2004.

Appeal from the United States District Court for the Eastern District of
Pennsylvania, Clarence C. Newcomer, J.
George A. Bochetto [Argued], Bochetto & Lentz, Philadelphia, PA, Harry
P. Marquis, Las Vegas, NV, Counsel for Appellant.
Robert A. Burke, Blank Rome, Philadelphia, PA, Lamont Jones [Argued],
Los Angeles, CA, Counsel for Appellee.
Before: RENDELL, BARRY and ROSENN, Circuit Judges.
RENDELL, Circuit Judge.

A boxing promoter seeks to recover from the District Court's knockout punch
aimed, and delivered, at the enforceability of its promotional agreement.
Banner Promotions, Inc. entered into a promotional agreement with boxer
Antwun Echols, the terms of which left Echols's compensation for participating
in bouts secured by Banner subject to negotiation between the two parties, and
to renegotiation under certain circumstances. The District Court determined that
the agreement's failure to specify minimum compensation for Echols's
participation in these bouts rendered it so indefinite as to be unenforceable. For
the reasons set forth below, we will reverse.

I.
2

Arthur Pelullo is the president and owner of Banner Promotions, Inc.

("Banner"), a company engaged in the promotion of professional boxers and

professional boxing matches. Antwun Echols is a professional boxer with a
current record of twenty nine wins, five losses and one draw.
3

In November 1999, Echols signed a Promotional Agreement ("the Agreement")

with Banner, receiving a $30,000 signing bonus. The Agreement granted
Banner "the sole and exclusive right to secure all professional boxing bouts
requiring [Echols's] services as a professional boxer and to promote all such
bouts" for a term of at least four years, and possibly longer, if certain conditions
were met. In essence, the Agreement gave Banner the right to be Echols's sole
representative in negotiations with any third parties that were interested in
having Echols box on their television networks, in their arenas, or against
boxers they represented.

Banner's major obligation under the Agreement was to "secure, arrange and
promote" not less than three bouts for Echols during each year of the contract.
Banner had sole discretion to determine the time and place of each bout. While
Echols had to approve each opponent, his approval could not be "unreasonably
withheld." Under Section Five of the Agreement, Banner could satisfy its
obligation to secure a bout "if it shall have made a bona fide offer in writing
irrespective of whether such [b]out actually takes place for any reason other
than Banner's nonperformance."

Section Six of the Agreement delineated Echols's compensation for his

appearance in the bouts secured by Banner:

Your purse for all bouts covered by this agreement shall be structured as
follows (a) non television, not less than $7,500.00 (b) Univision, not less than
$10,000.00 (c) Telemundo, not less that $10,000.00 (d) ESPN 2, Fox Sports or
small pay-per-view, not less than $20,000.00 plus $10,000.00 training
expenses. (e) HBO AFTER DARK as a challenger or in a non title bout, not
less than $45,000.00 plus $10,000.00 training expenses. (f) HBO AFTER
DARK as a World Champion not less than $80,0000.00 plus $10,000.00
training expenses. (g) HBO as a challenger or in a non-title bout, not less than
$50,000.00 plus $10,000 training expenses. (h) HBO as a World Champion, not
less than $125,000.00 plus $15,000.00 training expenses.

Thus, Banner was to pay Echols not less than a stated minimum amount for
each bout in which he appeared, with the amount of the minimum depending on
where the bout was televised and whether Echols appeared as a champion or
not. However, these "minimum purses" could be subject to renegotiation, or the

entire Agreement cancelled, at Banner's option, by operation of Section Eight,

which provided that "[i]f during the course of this Agreement Boxer should
lose any bout, Banner shall [sic] the right but not the obligation to rescind this
Agreement or the purses set forth in paragraph (6) shall be subject to
renegotiation."
8

One month after entering the Agreement, Echols lost a world championship
bout to Bernard Hopkins, triggering Section Eight. Banner chose not to exercise
its right to rescind the Agreement, but took the position that Echols's
compensation would thereafter be negotiated on a bout-by-bout basis. Indeed,
the parties proceeded to negotiate several individual bout purse agreements in
the years after the loss to Hopkins.

Echols, however, became dissatisfied with the situation. According to him,

Banner had made him "take it or leave it" offers offering him bouts for what
he believes is below-market compensation, and then rescinding the offers if he
attempted to negotiate for a larger purse. Because the operation of Section
Eight eliminated the minimum purses specified in Section Six, Echols felt that
he was forced to accept Banner's unsatisfactory offers in order to receive any
compensation at all.

10

Tension also arose between the two parties over a "step-aside" fee that Banner
negotiated on Echols's behalf in connection with a fight in Germany.1 Echols
believed that Banner misrepresented the amount of the "step-aside" fee, telling
him that it was less than it actually was, so that Banner could pocket the
difference.

11

Finally, in February 2003, Echols requested information about the purse for a
fight on March 15 of that year. Banner offered $30,000. When Echols made a
counter-offer, Banner responded by rescinding the offer and stating it would
offer the March 15 fight to another boxer. Echols filed this suit shortly
thereafter.

II.
12

In his complaint, Echols alleged that: (I) the Agreement was unenforceable for
indefiniteness; (II) Banner and Pelullo breached the covenant of good faith and
fair dealing by misrepresenting the amount of the "step-aside" fee; (III) Banner
and Pelullo committed fraud against him by misrepresenting the amount of the
"step-aside" fee; (IV) Banner and Pelullo violated the Muhammad Ali Boxing
Reform Act ("the Ali Act"), 15 U.S.C. 6301, by misrepresenting the amount

of the "step-aside" fee; and (V) he was entitled to a constructive trust over
monies that Banner and Pelullo owed him.
13

Echols also moved for injunctive relief preventing Banner and Pelullo from
asserting their rights under the Agreement in conjunction with a title bout that
was to take place in June 2003. The District Court denied the motion, finding
that Echols had not established irreparable harm.

14

Banner and Pelullo then moved to dismiss the Ali Act claim, arguing that
because the Ali Act did not apply to boxing matches fought outside the United
States and Echols had predicated his Ali Act claim on misrepresentations
relating to a match in Germany, Echols had failed to state a claim upon which
relief could be granted. The District Court granted the motion.

15

The defendants then moved to dismiss the remaining claims for lack of subject
matter jurisdiction, and both sides moved for partial summary judgment to
decide the enforceability issue. The District Court denied the motion to dismiss,
holding that the parties were diverse and that the amount in controversy
satisfied the statutory requirement for diversity jurisdiction. It then granted
Echols's motion for partial summary judgment and denied Appellants' crossmotion, holding that the Agreement was unenforceable for indefiniteness, as
the Agreement contained no price term. The parties then settled Echols's
remaining claims, with Banner and Pelullo reserving the right to appeal the
order declaring the Agreement unenforceable. They now exercise that right.

III.
16

The District Court had subject matter jurisdiction pursuant to 28 U.S.C. 1332.
We have appellate jurisdiction pursuant to 28 U.S.C. 1291. Our review of an
order granting summary judgment is plenary. Morton Int'l, Inc. v. A.E. Staley
Mfg. Co., 343 F.3d 669, 679 (3d Cir.2003).

IV.
17

A federal court exercising diversity jurisdiction must apply the choice of law
rules of the forum state. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487,
497, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Accordingly, we apply Pennsylvania
choice of law rules in this case. Pennsylvania courts generally enforce choiceof-law provisions in contracts. Kruzits v. Okuma Mach. Tool, Inc., 40 F.3d 52,
55 (3d Cir.1994). In this case, Section Nineteen of the Agreement provides that
it "shall be governed and construed under the laws of the state of Delaware."
Thus, our task is to predict how the courts of Delaware would resolve this issue

if presented with these facts. The District Court, applying principles of

Delaware contract law, held that the Agreement was unenforceable. However,
we predict that the Delaware Supreme Court would conclude otherwise, and
will accordingly reverse.
18

In Delaware, as in most jurisdictions, a court will not enforce a contract that is

indefinite in any of its material and essential provisions. Hindes v. Wilmington
Poetry Society, 138 A.2d 501, 503 (Del.Ch.1958). However, a court will
enforce a contract with an indefinite provision if the provision is not a material
or essential term. Id. The Delaware courts have not spoken on this issue
recently, nor have they ever really focused on what types of contract provisions
are material and what types are not, although they noted decades ago that "[t]he
general rule is that price is an essential ingredient of every contract." Raisler
Sprinkler Co. v. Automatic Sprinkler Co., 171 A. 214 (Del.Super.Ct.1934)
(citation and quotations omitted); see also Hindes, 138 A.2d at 503 ("A
provision for compensation is certainly one of the most important aspects of
any agreement.").

19

Here, the District Court held that the operation of Section Eight of the
Agreement, which required the parties to negotiate Echols's compensation for
appearing in bouts secured by Banner on a bout-by-basis after the December
1999 loss, "removed any mention of price from the agreement." In its view, "the
essence of the parties' agreement after [Echols's] loss became a contract to enter
into a future contract." Relying on the Raisler Sprinkler court's pronouncement
that "an agreement that [parties] will in the future make such contract as they
may agree upon amounts to nothing," the District Court deemed the Agreement
unenforceable.

20

We think this conclusion of the District Court is overly simplistic. It would no

doubt be correct if the Agreement between Echols and Banner were nothing
more than a contract for Echols to appear in a particular bout or series of bouts.
If that were the case, Echols's price for appearing in a bout would be a material
and essential term, and, consequently, the failure to specify the amount of that
compensation or some method of determining that compensation would
certainly make the contract indefinite. However, the Agreement does not
merely deal with a bout or a series of bouts. Rather, it establishes the
relationship between the two parties, a relationship in which Echols promised to
fight exclusively for Banner, and Echols desired Banner's services on an
ongoing basis. The consideration that Banner paid Echols to secure this
promise included a $30,000 signing bonus and a guarantee that Banner would
arrange at least three bouts per year for him. While the purses for these bouts
were relevant, we do not view them as so material and essential to the

understanding regarding the relationship such that providing that certain events
could alter the price would render the contract so indefinite as to be invalid.
21

This is supported by the way in which the Agreement was intended to function.
Under Section Four, Banner was obligated to secure three bouts for Echols per
year. Under Section Five, Banner discharged its duty to secure a bout "if it shall
have made a bona fide offer in writing irrespective of whether such [b]out
actually takes place for any reason other than Banner's nonperformance."
Notably absent is any requirement that Echols agree to such an offer or that
Echols must agree to such an offer before Banner will be deemed to have
fulfilled its obligation to him. As a result, the parties could satisfy the terms of
the Agreement without any bouts occurring, as long as Echols continued to deal
exclusively with Banner and Banner continued to make the required number of
bona fide offers.2 While neither party would likely be pleased with that result,
the Agreement with or without the minimum purse structure in place
clearly contemplates such an outcome. The Agreement does not require the
parties to enter into contracts for individual bouts, so it is not, as the District
Court posited, "a contract to enter into a future contract." Thus, it need not
specify the terms of those future contracts to be enforceable.

22

There is a paucity of Delaware law on point, and the pronouncements that do

exist are general in nature and quite dated. Under Delaware law, "it is well
settled that an agreement in order to be a legally binding agreement must be
reasonably definite and certain in its terms." Most Worshipful Prince Hall
Grand Lodge of Free & Accepted Masons of Delaware v. Hiram Grand Lodge
Masonic Temple, 80 A.2d 294, 295 (Del.Ch.1951). More recent authorities in
the area of contracts have considered the concept of definiteness; specifically,
the Restatement (Second) of Contracts 33(2) provides that "[t]he terms of a
contract are reasonably certain if they provide a basis for determining the
existence of breach and for giving an appropriate remedy." And, Comment e to
this section specifically acknowledges that price terms can be indefinite in
certain situations, setting forth tests that apply to contracts for the sale of goods,
and the rendition of services which the instant contract would appear to be.3
The material and essential terms of the Agreement here satisfy the Restatement
test. Echols breaches the contract if he deals with some entity other than
Banner; if he were to breach in this manner, Banner might be entitled to
injunctive relief prohibiting him from dealing with that entity and possibly
money damages. Banner breaches the contract if it fails to pay the signing
bonus or fails to make three bona fide offers per year; if it were to breach in this
manner, Echols might be entitled to rescission and possibly money damages.
More importantly, there is no breach in the event that Banner and Echols are
unable to reach an agreement on a purse for a particular bout. And there is no

uncertainty as to what occurs in such an event. The terms of the Agreement are
quite clear that Echols must continue to deal only with Banner and that Banner
must continue to secure bouts for and to promote Echols for as long as the
Agreement lasts.
23

While the Delaware courts have not had the opportunity to construe an
agreement of this type, there is one case from another jurisdiction that is clearly
on point. In Don King Prods., Inc. v. Douglas, 742 F.Supp. 741
(S.D.N.Y.1990), the court was confronted with a nearly identical issue. A boxer
argued that his agreements with a promoter were unenforceable for
indefiniteness. The promotional agreement between the two parties provided
$25,000 to the boxer in return for the exclusive right to promote his fights for a
period of time. Compensation for individual fights was made subject to further
negotiation and agreement, with the terms to be set forth in individual bout
agreements. The promotional agreement specified floor levels of compensation
for all bouts except title bouts, where the purse was to be "negotiated and
mutually agreed upon between [the parties]." Id. at 761. 4

24

The court found that while the agreement left certain terms open to future
negotiation, it was more than an agreement to agree, at least with respect to the
exclusivity terms, as it was "explicit and definite about [the boxer's]
commitment to fight only for [the promoter] during the life of those contracts
and about the minimum consideration he could receive for making that
commitment." Id. at 762. The fact that the agreement left open the
compensation that would be payable under certain circumstances (i.e., title
bouts) did not affect the essential subject matter of the agreement, as "the
writing manifests in definite language ... the agreement to deal exclusively with
one another with respect to title defenses and to negotiate in an effort to reach a
mutual understanding as to the open price term for such a defense." Id.

25

Similarly, the failure to specify Echols's purses does not affect the essential
subject matter of the contract in the instant case, which is the exclusive nature
of Echols's relationship with Banner and the services that Banner has agreed to
perform for Echols in exchange for this exclusivity. The Agreement clearly
indicates Echols's obligation to deal only with Banner and Banner's obligation
to secure a certain number of bouts for Echols. However, nowhere does it
obligate Echols to participate in those bouts, and, in the absence of such an
obligation, it is unnecessary for the parties to have agreed in advance upon
purses for Echols's participation. The purses were not material and essential
terms, and the fact that they were left open to future negotiation does not render
the contract unenforceable.

26

Other courts have enforced agreements that we find analogous to the one at
issue here. In Mantell v. Int'l Plastic Harmonica Corp., 141 N.J. Eq. 379, 55
A.2d 250 (1947), a contract between a plastic harmonica manufacturer and a
distributor did not fix a price for the goods to be distributed. When the
manufacturer sought to have the contract declared invalid for failure to set a
price, the court noted that the agreement was not purely one for the sale and
purchase of goods. Instead, it was one for an exclusive right to distribute the
goods in a certain region, and the consideration offered by the distributor was
for these rights.

27

This type of contract is a comparatively recent device to meet modern needs in

the marketing and distribution of goods on a nation-wide or regional scale. In
the very nature of the exclusive sales and distribution contract, it is not usually
practicable to fix prices and the quantum of goods sold; and the rules of
certainty and definiteness which govern the ordinary contract of sales have no
application. Unlike a pure contract of purchase and sale, agreements of this
class embody mutual promises and obligations with sufficiently definite
standards by which performance can be tested. The grant of the exclusive
franchise is a consideration for the grantee's obligation to establish and
develop a market for the sale and distribution of the product in the area
covered by the monopoly. The character of the contractual arrangement is such
as to preclude explicitness as to quantity and prices. This is especially so
where... the product is new and untried and its potential worth and market value
and the cost of manufacture and distribution are unknown quantities. Such
contracts have the requisite mutual assent and consideration. They are not
comparable to the ordinary executory agreement to buy and sell goods.

28

Id. at 256-57 (emphasis added). As a result, the court enforced the contract
despite its failure to set a price for the goods.

29

In Allied Disposal, Inc. v. Bob's Home Service, Inc., 595 S.W.2d 417
(Mo.App.1980), a waste disposal company contracted with a waste site owner
for exclusive use of the site. The price it was to pay for the use of the site was
to vary from month to month, as "mutually agreed upon by the parties for each
contract of hauling." Id. at 418. When the waste disposal company sought to
have the contract declared void for its failure to specify a price, the court
upheld the arrangement, due to its similarity to an exclusive sales and
distribution contract. Id. at 420. The open price term merely reflected the
parties' knowledge that different types of waste required different disposal
methods, and that since there was no way to know in advance how much of
each type of waste would be disposed, it was wise to leave the exact price to be

negotiated later. Id. at 421.

30

In Marcor Mgmt., Inc. v. IWT Corp., 1998 WL 809011 (N.D.N.Y. Nov.17,

1998), the parties had entered into a contract under which Marcor paid IWT a
sum of money for exclusive marketing rights to IWT's soil remediation
technologies. The agreement between Marcor and IWT did not state a price at
which IWT would sell its product to third parties identified by Marcor. When
IWT argued that the agreement with Marcor was unenforceable because these
price terms were left open, the court disagreed, stating that "the fact that a term
is left open does not automatically render a contract unenforceable." Id. at *6
(citing Restatement (2d) of Contracts 33). The court noted that the contract
required IWT's consent before it could be bound to any agreement with a third
party and concluded that "a reasonable interpretation of this provision is that
the parties would mutually agree upon the price at a later date." Id. Because
there was no requirement that IWT enter into future contracts for its services,
there was no problem with the fact that the exclusive marketing agreement with
Marcor left open the price terms of such contracts.

31

Although the Agreement between Banner and Echols deals with a very different
subject matter from the contracts at issue in Mantell, Allied Disposal, and
Marcor, its structure closely resembles the structure of the agreements in those
three cases. In each of the three cases, one party bargained for the exclusive
right to distribute, use or market the other party's product or service, just as
Banner bargained for the exclusive right to promote Echols in the instant
situation. In each of the three cases, the prices of specific transactions that
might occur within the exclusive relationship were left open, just as the purses
for any bouts that Echols might fight during the course of the exclusive
promotional agreement were left open here. And, as a practical matter in these
fact settings, the price would presumably be affected by certain factors arising
later, beyond anyone's control. Leaving the prices to be negotiated at a later
time would allow the parties to arrive at a more informed decision. So too,
here, losses by Echols clearly would impact the value of his bouts, and later
negotiations would better address any such situation.

32

We recognize that these pronouncements are from courts other than those of
Delaware. The Delaware courts have not had an opportunity to confront the
issue of price indefiniteness in the context of an exclusive distribution or
marketing contract. What little Delaware case law exists regarding indefinite
terms tends to arise in situations involving a pure sale of goods or services. See,
e.g., Hammond & Taylor, Inc. v. Duffy Tingue Co., 161 A.2d 238
(Del.Ch.1960) (examining a contract for sale of a business); Hindes v.
Wilmington Poetry Society, 138 A.2d 501 (Del.Ch.1958) (examining a contract

for sale of a manuscript); Most Worshipful Prince Hall Grand Lodge of Free
and Accepted Masons of Delaware v. Hiram Grand Lodge Masonic Temple, 80
A.2d 294 (Del.Ch.1951) (examining a contract for a sale of stock); Raisler
Sprinkler Co. v. Automatic Sprinkler Co. of America, 171 A. 214
(Del.Super.Ct.1934) (examining a contract for a license). While these older
Delaware cases stand generally for the principle that price is an essential term
of every contract, we believe this principle would give way if fact patterns were
presented, such as those in Mantell, Allied Disposal, and Marcor, where the
price left indefinite was not the price of the exclusive relationship, but the price
of a transaction occurring within that relationship, and Delaware would address
these nuances in the same reasonable manner as the courts did in these cases.
Also, because Delaware appears to have embraced the Restatement of
Contracts,5 which addresses, and reflects a more modern view regarding
enforceability notwithstanding indefinite price terms, we predict that the
Delaware Supreme Court would find the instant Agreement to be enforceable.
33

We reject not only the somewhat simplistic view of the District Court but also
the impassioned view of our dissenting colleague. The issue squarely presented
involved indefiniteness in specific terms, not bargaining power, oppression or
other factors. The unequal bargaining power of a boxer in the boxing
marketplace was not briefed, nor do we think that it should impact our analysis
of certainty in contractual terms.

V.
34

In light of the foregoing discussion, we conclude that the District Court erred
when it determined that the Promotional Agreement's failure to specify
minimum compensation for Echols's participation in bouts secured by Banner
rendered it so indefinite as to be unenforceable. Accordingly, we will
REVERSE the District Court's order granting summary judgment in favor of
Echols.

Notes:
1

Under certain circumstances, boxing association rules force a champion to offer

to fight the next-ranking contender. If the champion wishes to fight a boxer
other than the next-ranking contender, or if a boxer other than the next-ranking
contender wishes to fight the champion, they may pay the next-ranking
contender to decline the champion's offer and "step aside" for another boxer.
Such a payment is known as a "step-aside" fee

The dissent opines that under our interpretation of the contract Banner could
comply with the contract terms by making offers for fights at any price.
However, this contention ignores the contractual requirement that the offers be
"bona fide," and the covenant of good faith and fair dealing implied in contracts
under Delaware lawCincinnati SMSA Ltd. P'ship v. Cincinnati Bell Cellular
Sys. Co., 708 A.2d 989, 992-93 (Del.1998).

Comment e, concerning Indefinite Price, provides:

Where the parties manifest an intention not to be bound unless the amount of
money to be paid by one of them is fixed or agreed and it is not fixed or agreed
there is no contract. Uniform Commercial Code 2-305(4). Where they intend
to conclude a contract for the sale of goods, however, and the price is not
settled, the price is a reasonable price at the time of delivery if (a) nothing is
said as to price, or (b) the price is to be left to be agreed by the parties and they
fail to agree, or (c) the price is to be fixed in terms of some agreed market or
other standard as set or recorded by a third person or agency and it is not so set
or recorded. Uniform Commercial Code 2-305(1). Or one party may be given
the power to fix the price within limits set by agreement or custom or good
faith. Similar principles apply to contracts for the rendition of services.

The dissent correctly notes that the parties later reached a second agreement,
but misstates the effect of that agreement. It established that the boxer would
receive a $1.3 million purse for a title bout in Tokyo, Japan, and $1 million per
fight for his first three post-Tokyo fights, unless he was the winner in Tokyo, in
which case the amount per fight would be subject to negotiation with $1 million
as a floorDon King, 742 F.Supp. at 762. It did not establish a $1 million
minimum purse guarantee for all title bouts. If the boxer fought in a title bout
after the three post-Tokyo fights, there was no minimum guarantee for that
fight in either the original contract or the second agreement. Thus, even after
the second agreement, when the court decided the case, there were still fights
for which there were no minimum purse guarantees.

Although the Delaware Supreme Court has never relied upon Section 33 of the
Restatement, other Delaware courts have cited it with approvalSee, e.g.,
Independent Cellular Telephone, Inc. v. Barker, 1997 WL 153816, at *4
(Del.Ch. Mar.21, 1997); Middle States Drywall, Inc. v. DMS Properties-First,
Inc., 1996 WL 453418, at *8 (Del.Super.Ct. May 28, 1996).

35

ROSENN, Circuit Judge, dissenting.

36

Boxing is a perennial sport, stretching from the golden days of ancient Greece

to present times. The professional life of a boxer, however, is ephemeral and

because of the violence of the sport, is limited to a few fleeting years. The
possibility of a defeat is always imminent. Thus, a purported contract between a
promoter and boxer, which permits the promoter in the event the boxer "should
lose any bout" to rescind its obligation to provide any minimum purses, lays all
the odds in favor of the promoter.
37

Boxer Antwun Echols ("Echols") and his promoter, Banner Promotions, Inc.
("Banner") dispute the enforceability of the exclusive promotional agreement
that they executed in 1999. The purported contract, drafted by Banner and
governed by Delaware law, allowed Banner to retain the exclusive promotional
rights to secure all professional boxing bouts for at least four years, but failed to
maintain any price term following a defeat. As drafted, Echols must rely on
Banner's good will for future compensation, hoping that the promoter will
renegotiate acceptable new terms on either a bout-by-bout or collective-bout
basis. If the new financial terms are unacceptable to the boxer, the purported
contract does not allow him to look elsewhere. In my mind, this one-sided
instrument is not a legal contract. The instrument is not worthy of judicial
enforcement, and I believe that the Delaware Supreme Court would hold it
unenforceable. I therefore respectfully dissent.

I.
38

The majority acknowledges the that Delaware Courts "will not enforce a
contract that is indefinite in any of its material and essential provisions." (Maj.
Op. at 278) But, the majority rationalizes that the disputed agreement "does not
merely deal with a bout or a series of bouts" but with "the relationship between
the two parties, a relationship in which Echols promised to fight exclusively for
Banner...." (Maj. Op. at 278-279) Every contract between two parties deals with
a relationship, but from the boxer's corner, the essential ingredients of that
relationship are the bout or series of bouts and the obligation of the promoter to
provide a purse for the boxer.

39

A professional fight is no mere exhibition. It is a contest for victory and money.

The relationship between a promoter and a boxer is meaningless unless the
boxer engages in his craft and receives appropriate compensation. Therefore,
the bouts and their purses are not only relevant, but material and essential to the
relationship. The details spelled out in Section Six of the disputed agreement
with respect to the purses for all bouts reflects how important and material the
related parties regarded the purses. The majority's ipse dixit statement that the
purses are not essential completely ignores the language painstakingly set forth
in Section Six.

40

Boxing can be a brutal business, and fighters have precious little time to
capitalize on their talents and age. In this case, the price limits set forth in
Section Six guaranteed the minimum compensation that Echols could expect
each time he stepped into the ring. Therefore, the essentiality of the minimum
price term to the bargain reached between the parties to this contract cannot be
denied.

41

Neither party disputes that from the time the instrument was executed until
Echols' first boxing loss, the contract guaranteed Echols minimum purses for
each fight. However, following Echols' loss to Bernard Hopkins in 1999,
Section Eight of the instrument authorized Banner to either "rescind this
Agreement or the purses set forth in paragraph (6) shall be subject to
renegotiation." Banner did not rescind, but elected to renegotiate. The majority
interprets this clause as requiring that the price terms thereafter must be
renegotiated on a "bout-by-bout" basis. (Maj. Op. at 278) However, the District
Court interpreted the contract differently, and found the clause in Section Eight
to be "undoubtedly ambiguous." (D. Ct. Op. at ____) According to the District
Court, the renegotiation clause may also be interpreted to require that following
a loss, the entire minimum price structure must be renegotiated all at once,
establishing new price minimums to govern the agreement. (D. Ct. Op. at ____)
Under this interpretation, the parties would be able to revitalize the instrument
following the defeat by renegotiating a schedule of minimum prices that reflect
Echols' market value as a fighter with one loss.

42

I recognize that both interpretations of the renegotiation clause present risks to

the parties. If price minimums are to be renegotiated all at once, both parties
risk that a new agreement will not be reached and the contract, which they
otherwise would choose to maintain, would be voided. On the other hand, if
prices are left to be renegotiated on a bout-by-bout basis, the boxer risks that he
will be forced to accept whatever minimal price the promoter offers, or not
fight at all. For the reasons described below, I believe that under the relevant
contract law, the former interpretation is the only enforceable and fair option.

43

Echols essentially argues that he did not bargain for an agreement where
following a loss, he is left to either fight for whatever price Banner offers, or
not fight at all. I believe that the general rule of contract law, recognized in
Delaware and other jurisdictions, that "price is an essential ingredient of every
contract ... for the rendering of services" is intended to protect against exactly
the situation that Echols now faces. Raisler Sprinkler Co. v. Automatic
Sprinkler Co., 171 A. 214, 219 (Del.Super.Ct.1934) (citation omitted). See also
Middle States Drywall, Inc. v. DMS Properties-First, Inc., 1996 WL 453418, at
*7 (Del.Super. May 28, 1996).

44

The majority holds that while the purses for the fights are "relevant," they are
not material and essential because the parties could satisfy the terms of the
agreement without any bouts occurring. I acknowledge that under the strict
terms of the contract, Banner could make three offers per year for boxing
matches with de minimus purses, Echols could reject all of Banner's offers, and
both parties would be technically compliant with the contract terms. Under this
interpretation, a court could determine when a party breaches these terms,
thereby providing some level of reasonable certainty in the contract.6 However,
I do not believe that this theoretical certainty changes the essential character
and terms of this boxing promotion contract, nor does it make the contract
enforceable under Delaware law. Even the most basic service contract would be
deemed unenforceable if it failed to state a price term, regardless of whether the
contract requires the parties to ever actually exercise their ability to purchase or
sell the services. The Delaware Superior Court reinforced this idea in Raisler
Sprinkler, explaining that

45

[o]ne of the commonest kind of promises too indefinite for legal enforcement is
where the promisor retains an unlimited right to decide later the nature or extent
of his performance. This unlimited choice in effect destroys the promise and
makes it merely illusory. * * * But a promise to give anything whatever which
the promisor may choose ... is illusory, for such promises would be satisfied by
giving something so infinitely near nothing or by performance so indefinitely
postponed as to have no calculable value.

46

171 A. at 219 (quoting Williston on Contracts, vol. 1 43).

47

The majority portrays Section Eight of the purported agreement to allow for
certain events to merely "alter" the price structure in the contract. (Maj. Op. at
278-279) In my view, Section Eight does more than alter the price. It removes
the price structure completely, and this renders the contract fatally defective.
Under the majority's holding, Echols' loss authorizes Banner to make offers for
fights at any price, even below market rates, and still remain technically
compliant with the contract terms.7 I believe this holding "destroys the promise
and makes it merely illusory." Id. In reality, all boxers eventually lose, and
some live to fight another day. Although a loss may decrease a boxer's market
value, and some mechanism to adjust price may be required to account for this
lack of certainty in the boxing market, I believe that the Delaware Supreme
Court would interpret the prior case law in the state to require the maintenance
of some minimum price in order to deem the contract enforceable.

II.

48

In my view, the sparse case law on this topic also supports the premise that
boxing promotions contracts must have at least some minimum price term to be
enforceable. Both Banner and the majority cite to Don King Prods., Inc. v.
Douglas, 742 F.Supp. 741 (S.D.N.Y.1990), to support their position in this
case. Yet, Don King supports the opposite conclusion. The original contract in
Don King set forth minimum prices for all bouts except title bouts, and the
parties later reached a second agreement establishing a $1.3 million purse for a
title bout and a $1 minimum purse guarantee for the next three fights, subject to
renegotiation upwards in price if the fighter, Douglas, should win the
heavyweight title. 742 F.Supp. at 748, n. 5. Therefore, when the court decided
the case, there were minimum price guarantees in place, and Douglas was
forced to take the position that because his market value as a fighter had risen
significantly, the $1,000,000 price minimum was "insufficient to render the
contract sufficiently definite for enforcement." Id. at 761. The court found that
the $1,000,000 minimum price was sufficient to bind the parties, and clearly
stated that "the minimum price terms, together with DKP's upfront payment of
$25,000 and its commitments to hold a set number of bouts, clearly did provide
an expectancy of compensation for Douglas that was sufficiently definite to
induce his promise to fight exclusively for DKP." Id. at 763 (emphasis added).
Thus, Don King stands only for the proposition that an exclusive boxing
promotion contract with an indefinite price structure, supported at least by
minimum price terms, is enforceable.

49

Furthermore, Don King establishes that minimum price terms are considered
part of the bargain that a promoter offers a boxer to induce a promise of
exclusivity. By failing to consider the minimum price term as an essential
component of the bargain in the present case, the majority deviates from the
rule established in Don King. Under the majority's holding, a boxer loses the
certainty of minimum compensation; the promoter, however, maintains
exclusive control. Echols maintains a price guarantee as long as he wins, but
receives no minimum price guarantee after a loss, when he is most vulnerable.
The effect of the majority's decision is to leave a boxer subject to the whim and
mercy of the promoter, once the boxer loses a bout.

50

Similarly, I believe that the majority's reliance on the Restatement (Second) of

Contracts is equally misplaced. Section 33(2) of the Restatement acknowledges
that price terms may be indefinite in certain situations. However, Comment e,
relied upon by the majority, deals primarily with contracts for the sale of goods,
where price may be determined through market forces. To the extent that
Comment e may also "apply to contracts for the rendition of services," it also
states that "one party may be given the power [to set the price] within limits set
by agreement or custom or good faith" (emphasis added). In my reading, the

contract between Echols and Banner operated in accordance with Comment e

before Echols lost a fight, because it did not set specific prices, but allowed
Banner to make offers for bouts "within limits," i.e. above the minimum price
levels. After the loss, all limits were removed and no formula was set forth to
fix prices for purses. Therefore, the contract no longer complied with Comment
e.
51

Finally, the cases cited by the majority from jurisdictions outside of Delaware,
Mantell v. Int'l Plastic Harmonica Corp., 141 N.J. Eq. 379, 55 A.2d 250
(1947), Allied Disposal, Inc. v. Bob's Home Service, Inc., 595 S.W.2d 417
(Mo.App.1980), and Marcor Mgmt., Inc. v. IWT Corp., 1998 WL 809011
(N.D.N.Y. Nov.17, 1998), are all distinguishable in two key respects. First,
none of the products or service contracts in these cases included a defined price
limit at the time of contract ratification that was relied upon as an essential term
in the original bargain. Thus, it is more reasonable in these cases to conclude
that price was a non-essential term. Second, the cases cited by the majority
dealt with contracts for new products (Mantell), new technology (Marcor), or
undefined services (Allied Disposal). Therefore, those contracts all dealt with
situations where there was extreme market uncertainty that could not be
sufficiently defined at the time of the agreement. The court in Mantell noted
that the recent development of contracts with indefinite price terms may be
particularly necessary where "the product is new and untried and its potential
worth and market value and the cost of manufacture and distribution are
unknown quantities." 141 N.J. Eq. 379, 389, 55 A.2d 250.

52

Even though individual boxers may be untested, the sport and spectacle of
boxing is hardly a new industry with unknown production and distribution
costs. If a promoter and a boxer can reasonably agree to minimum purses when
the boxer is undefeated, they should be able to agree fairly on them when the
boxer has one loss and both retain some bargaining power. The disputed
instrument leaves the boxer with no guaranteed purses, no bargaining power,
and the promoter in total control of his boxing career for the next several years.

53

The District Court found the contract unenforceable because the contract is an
agreement to negotiate future agreements without specifying its material and
essential price terms. (D. Ct. Op. at ____) I agree with the District Court.

III.
54

Therefore, I would hold the contract in this case unenforceable and affirm the
judgment of the District Court.

Notes:
6

"The terms of a contract are reasonably certain if they provide a basis for
determining the existence of breach and for giving an appropriate remedy."
Restatement (Second) of Contracts 33(2)
The majority, at note 2, opines that because the agreement requires Banner to
make "bona fide" offers, a de minimus price offer would not be valid under the
agreement and may trigger a breach. First, interpreting "bona fide" to mean that
a court should imply a reasonableness standard to the price term is inconsistent
with the majority's holding that the price term is non-essential. Second, I find
no case law, in Delaware or elsewhere, establishing that a "bona fide offer"
implies a reasonable price term. Rather, when used to describe an offer, the
term "bona fide" refers to an offer intended to produce a legal contract,
regardless of whether the price is reasonable. See e.g. Foxboro Co., Inc. v. Soft
Systems Engineering, Inc., 894 F.Supp. 48, 51 (D.Mass.1995) (explaining that a
bona fide offer refers to an offer made with an intent to bind); In re Formica
Corp. Shareholders Litigation, 1989 WL 25812, at *11 (Del.Ch. Mar.22, 1989)
(explaining that an offer to purchase a company made for the purpose of
stimulating stock activity and raising share price is not a bona fide offer).
Under this definition of "bona fide," Banner could make bona fide offers for
fights at any price, as long as the offer is intended to bind the parties if
accepted.